Haynes International's $100 million DIP facility at Libor plus 250 - 350 bps

By Jeff Pines

Washington, March 30 - Haynes International, Inc.'s $100 million debtor-in-possession revolver with Congress Financial Corp. bears interest at between 250 and 350 basis points above Libor, according to the March 29 motion filed with the U.S. Bankruptcy Court for the Southern District of Indiana.

Loans based on accounts and inventory will have an interest rate of Libor plus 250 bps if excess availability is $20 million or more, rising to Libor plus 275 bps for $10 to $20 million of availability and Libor plus 300 bps for less than $10 million excess availability.

Loans based on fixed asset availability will have an interest rate of Libor plus 300 bps if excess availability is $20 million or more, rising to Libor plus 325 bps for $10 to $20 million of availability and Libor plus 350 bps for less than $10 million excess availability.

The interim request to the court is to give the Kokomo, Ind.-based company access to $90 million. After using the revolver to pay off its $72 million pre-petition bank debt, it will have $18 million of credit available.

Haynes argued that it was not placing its pre-petition bank debt with Fleet Capital Corp. ahead of other creditors but that it would otherwise be unable to obtain DIP financing since a pre-petition lender would not consent to the post-petition lender taking precedence over it in liens.

The DIP facility matures at the earliest of nine months, the effective date of a reorganization plan, or the last termination date in the interim or the final order. It may be extended up to three years.

The commitment fee is $527,000 with a $527,000 closing fee. In addition, the revolver has a 3/8% unused line fee, a $250,000 syndication fee, a quarterly servicing fee of $15,000 and a 1% early termination fee.

In addition, Congress agreed to give the company exit financing for no extra cost or commitment fees.

Haynes, a manufacturer of high performance alloys, filed for Chapter 11 on March 29. Its Chapter 11 case number is 04-05364.

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